Thank you, everyone, for being here again on day two of the Wolfe FinTech Forum. Again, I'm Darrin Peller, covering Fintech and Payments Processors and IT services for Wolfe Research. Really happy to have Fiserv with us. As you guys know, it's a company that many of us have followed for many years through its various forms and changes as the years have progressed. But Bob's been with the company for years now. Really happy to have you with us, CFO of the company, along with Julie and the team here from IR. First of all, thanks. Thanks a lot for joining us. Sure. Look, I mean, there's been some, maybe we'll just get it out of the way. I mean, there's been some media reports, obviously, about, you know, Shift4. And I know they canceled from the conference in terms of a stage appearance. I mean, maybe just comment. Are you actually looking at that asset, or? Yeah, I hadn't seen those reports, so first off, thanks for having me. There have been a few changes in the company. I've been with the company eight years today. I'm celebrating my anniversary with you. Look, the simple fact is, first and foremost, as a longstanding practice, we don't comment on rumors. So get that one right out of the way. We have a tremendous track record on capital allocation. Our capital allocation strategy has been quite consistent for a lot of years, and it remains consistent. We will allocate capital for organic growth opportunities, and we continue to do that. Last year, we had our third consecutive year of double-digit top-line growth. We're forecasting another great year in 2024 organically. Over the last four years or so, we've done a couple billion dollars' worth of acquisitions. Last year was a little bit light. Given what's going on in the market, I don't feel like we missed on any real big opportunities. We continue to explore things on a very regular basis. My M&A team is busy. Where we see real opportunity and where we can bring value to our investors, we'll bring that value. Most of our acquisitions are of moderate size, tuck-in opportunities, where we can add value to our clients and obviously bring value to our shareholders. That $2 billion that we spent in the last 4 years is over probably 15 acquisitions, order of magnitude $150 million per deal. I think the largest one we did in the last 4 years was the FinTech transaction for, you know, less than $750 million. We have the capacity to do bigger. But the bigger the deal, the bigger the value. We'll continue to explore things. I read the most recent rumors that got stoked again. I'm here today. OK. I'll let people define that as they wish, I suppose. Look, with that said, let's shift to macro trends. Let's just shift to the most recent trends that you're seeing. I think you guys could probably say you see more spend than any other merchant acquirer in the U.S., just given your size and how much you cover. So when we think about the most recent spending trends and how they've evolved since we last heard from you, any update and just comments on what you're seeing? Yeah, I think, like you're hearing from most, we're seeing continued, robust, steady consumer spending, particularly in the U.S. U.S. consumers are continuing to spend. We did see, like many others talked about, a bit of a slowing in January that many were picking on weather as their reason. I'm a bit of a skeptic. When I heard that, I checked in with our own folks. Sure enough, we saw the same sort of a thing. And we did some pretty deep digging into specific verticals held by ZIP code, checking weather patterns. And we definitely saw that impact. And then we saw things bounce back as weather warmed up and into February and now into early March. In fact, you actually may have seen, we published, two weeks ago, a little less than two weeks ago, the latest Fiserv Small Business Index, which we're now publishing on a monthly basis, that measures the health of small businesses within the U.S. And we saw a nice tick up in February sequentially. The highest measure. It is an index against a baseline of 2019, the highest number that we've seen so far in the five years, going back to 2019. A nice pick up year-over-year, a little bit of a pick up sequentially. So, so far, so good. OK. And so, you know, when we think about where we're seeing it across verticals or any more nuances you're seeing across the space, or? Yeah, actually, if you look at in particular verticals that we're paying attention to, again, the Fiserv Small Business Index, that's a measure of what's going on in the U.S. It's not Fiserv's results. And there will be differences because we are taking all of the data, all of the information that we have, and projecting it or applying it to the U.S. So different balance of verticals, different industries. It includes cash and check capabilities, which obviously doesn't drive our merchant business. And we saw some strength in restaurant, particularly in February after you got through that weather. Typically, January is a little bit slower. There's a lot of volume in restaurants through the holiday period. Things slowed down a little bit in January. Right. Weather took that down. That came back a little bit more in February. Retail improved again into February. So generally, I would say, across verticals, we're seeing the consumer continue to spend. We do anticipate, based on what we're hearing from the macro environment, what economists are predicting, a little bit of a slowing this year relative to last year. But still projecting that soft space. So far, you're not really seeing much, right? Maybe we just shift gears and talk higher level now. The company has so many different initiatives it works on, and a lot of growth drivers. So maybe just where are you focusing your time? What are you most excited about in terms of priorities? Yeah, if you think about the company and beginning this year, 2024, we're really describing the business in two segments, our Merchant Solutions and our Financial Solutions. Yep. But across both of those segments, we're really focused on adding more clients, growing with those clients, and growing wallet share or selling additional capabilities, value-added services. And that's true across both of our businesses, both with merchant and financial institutions. And it's something we've been focused on for the last couple of years, developing operating systems for our clients. If you think about merchant, we have our Clover, which is the operating system for small businesses. And we have Carat, which is our operating system for enterprise clients, building out that capability, giving them easy access to those value-added solutions. You've seen our value-added solutions penetration grow very nicely, in the Clover solution, up to 19% of revenue, in the Q4 of last year, up about, call it, almost 400 basis points from a year ago. We see that continuing to grow into to 2026, at 27% penetration, helping drive the overall growth of the merchant solution. If you look at Carat, really our enterprise operating system, offering easy access to a variety of solutions through an API solution, a single platform rich in data for our large enterprise clients to manage their business, both in terms of physical point of sale and in e-commerce, really an omnichannel solution, which is as you think about the largest enterprise, really how they do business. Yes, there are some very large enterprises that are primarily or almost singularly focused on e-commerce. But the vast majority of enterprises are really an omnichannel situation in creating capabilities for them. And then financial solutions, it's building out our core account capability, adding value-added solutions. You heard us in our November Investor Day talk about our Cash Flow Central solution, which is a capability for financial institutions to offer cash flow capabilities, AR and AP, for their small businesses. I'm seeing some great uptick on that. We just launched that in the Q4 of last year. We announced a couple of large clients, Washington Federal, U.S. Bank signing up for that, already. I see some great pipeline in that. This is a revenue driver for our financial institutions that enables them to deepen their relationship for their small business clients, a very important client base. B2B side, yeah. And a revenue driver for a financial institution in today's world is a good thing. XD, our new digital banking capability, world-class capability for our community financial institutions, even our regional banks, see some great uptick. And again, in our November Investor Day, we talked about some significant issuer wins, $125 million worth of new wins that we'll implement this year and into next year that provide growth for 2024, 2025, and beyond. Yeah, I mean, it sounds like you have quite a few assets you want to have a great run at growth for some years to come. So I guess this kind of goes back to that first question a bit in terms of what you're looking at. I mean, do you have any gaps that you feel like you need to fill in terms of areas to improve or assets you would need to acquire? I mean. Certainly, there's always opportunities to improve, from a delivery standpoint, from a solution standpoint. We do that both organically and inorganically. In fact, in many cases, we partner with it. So it's not even. It's neither organic or through acquisitions. It's through partnership. A lot of those partnerships end up as inorganic M&A opportunities. But, you know, when I woke up this morning, I wasn't pining for any capability. I didn't say, geez, I've got to find a way to go buy X because then I really have something. And we got some great growth opportunities, double-digit growth again this year. We see that into the next several years, continuing to grow across the board. And just while we're still on this capital allocation, and then we'll go back to the core business topic, I mean, you mentioned deal sizes being generally smaller, right, tuck-in combined for $2 billion over the last few years. Is that still where your head is, these tuck-in type, you know, enhancing opportunities? Or could it be more meaningful? I, I would say, tuck-in type, yes, not necessarily of that, that size. Again, plenty of capacity. We've delevered the balance sheet pretty meaningfully over the last couple of years. Yeah. Post-merger, we're now at a level that we're very, very comfortable with. We have the opportunity. We could lever up, you know, significantly, in terms of having the capacity on the balance sheet and then delever without any problem, given the cash flow capabilities of the existing company. Right. So the dry powder is there. Would I tell you that over the next 12 or 14, 18 months, it's going to continue to be that $100 billion range? I wouldn't tell you that because I'm not focused on a particular range. I'm looking for value creative opportunities. And if that means putting to work more capital in a larger opportunity, we'd definitely do that. OK. All right, that's helpful. Why don't we shift to the business a little more again and just some of the opportunities you mentioned, Clover being probably the most exciting and the one we've heard the most. A lot of investors have spent the most time on. But maybe just remind us the end markets there, how they're evolving for you, how spending trends in these markets are relative to the start of the year, and really what you see going so well for Clover relative to what you would have expected a couple of years ago, honestly. Yeah, so I'm excited about a lot of different growth opportunities across our business. Clover's certainly a significant one for us. We are focused, again, as I said in my opening comments, across the company, but very much true in Clover, adding new clients, growing with those clients, and then adding value-added services. The secret sauce is not really secret. It's get more clients and sell more stuff to those clients. Yep. We continue to see real opportunity to do that. We're doing that really through a number of different focuses. One is, growing specific vertical capability, restaurant, retail, and services. Mm-hmm. And, and building solutions for those three verticals in particular. You saw us last year launch the new Kitchen Display System, for example, in the restaurant space, giving a restaurant full front and back of kitchen capabilities and continue to build and bring new solutions to our restaurant clients. We also are looking to build out horizontal capabilities, growing by offering Clover solutions to our ISV partners to reach a much longer tail of lots of other verticals. While we're focused on those three today, ISVs give us some, some strong reach across the board. We're going internationally. In 2024, we'll bring Clover to Brazil and Mexico. In 2025, we plan to add Australia, Singapore, and Hong Kong. It's already in Germany. What markets is it in internationally, right? So Germany, UK, Ireland, Argentina. Germany, last year, we launched the joint venture with Deutsche Bank, joint venture called Vert, bringing Clover deep into Germany. So we see opportunities to grow with our existing international footprint, but also expand internationally. And then over the last couple of years, we've really built out digital capability or and direct capability. So, we didn't have used to have a direct sales force. And over the last couple of years, we've built out that direct sales force capability as well as enhance our clover.com solution, where you can go online and sign up direct yourself. Yeah, I mean, listen, when it comes down to it, I think you're still seeing your distribution help quite a bit internationally. And your technology is obviously differentiated enough to win. But 30% growth revenues and, you know, 17% volume, number one, it's a big spread. I'd love to hear more about in terms of what you think is really driving that and sustainability. And then more importantly, just do you do these variables that you just mentioned give you sustainability to this type of growth through the next couple of years on Clover? Yeah, we definitely think it's very sustainable. And in our November investor conference we held, we actually updated our growth projections for Clover in general, for merchant, for the entire company, adding 2026. Yep. Previously, we had guided to $3.5 billion of revenue by 2025 for Clover. Updated we added 2026, now $4.5 billion by 2026. That's a CAGR of 28%-29% between 2022 to 2026. It's deeper value-added services penetration, which helps that spread, getting up to a 27% penetration from 19% today. We continue. We've seen some great growth on that, in recent history, the last couple of years. We continue to see that building out in the future. And again, all of those elements, direct channel, international expansion, Clover for ISVs, all of those give us that growth output. That's great. And the spread, again, just—I mean, there were a lot of drivers: software, services. Yeah. Maybe just expand on what's driving that spread again. Yeah, you know, it's not something that we focus on internally in terms of maximizing that spread. Right. It's something we talk a lot about, during earnings calls, and in various investor conversations. I think it's a question around, geez, what's going on? Is that sustainable? Well, we certainly want volume. And that's that first element of add more clients. Then you've got to retain those clients and grow with those clients. And growing with them means enabling their growth. That's the operating system that's giving them those new value-added services so that they have their own internal growth that gives us more volume but also gives us that more value-added services. As that value-added service penetration grows, the spread grows. It's more dollars of non-volume-based activity, that software sale, that drives some of that spread. Right. And I assume you have some ISOs that you're going more direct around, and that helps. I guess there's also questions on whether the Argentina impact is also driving some of that spread that's less sustainable. Or, you know, we just want to make sure we understand if revenue growth rates at a certain level can hold up, even if Argentina or other factors come back. Yeah, so, about two or three quarters ago, we started talking about the transitory benefit from Argentina. And we're trying to be as transparent and clear on this as possible. The inflation and interest rate dynamic down in Argentina, which is extraordinarily high right now, is driving transitory benefit in organic growth. And you've seen that move pretty meaningfully. And we've started to describe that on a quarterly basis so people understand it is transitory. What you sometimes haven't picked up is that offsetting that in the P&L, organic growth is a metric. It's a driver of the P&L. But offsetting that is foreign currency as a headwind. Sure. In fact, in 2023, you saw that almost as a, quote, "natural hedge." It's not a hedge in terms of us actively hedging the currency. But the FX devaluation is offsetting that transitory benefit. As the inflation rate and interest rates ease, which we anticipate that beginning to happen in the second half of the year, you'll actually see that organic growth, that transitory benefit ease. But you'll also see the FX headwind ease. Right. In an adjusted revenue standpoint, the transitory nature is nearly offsetting, exactly offsetting that by an FX. It doesn't matter that much. I don't know what that means. So we actually are starting to see some of that inflation ease just a little bit. And we'll see that again, we expect to see that in the second half of this year. So organic growth will slow a bit. We'll describe that transitory benefit easing. But you'll also see a lessening of FX. The FX headwinds have grown quite meaningfully in the last couple of years. Yeah. If you rewind three years ago, we didn't talk about FX at Fiserv. It was kind of 1% headwind in revenue. It's moved pretty meaningfully in the last. Sure. It's all nearly all driven by Argentina and nearly all on our merchant business. Again, it's offsetting that transitory benefit. That's fair. Yep. Why don't we shift to Carat? Your, your, you know, enterprise-oriented, e-com-centric business has done well. And we'd love to hear more from you on what you think is resonating with, with clients about that? Yeah, so this, this is a solution really at its at its core is a solution we call Commerce Hub. And this is an opportunity, a solution that we bring to our large enterprise clients for them to consume a variety of different value-added services on an API basis, very easy to consume capabilities. Large enterprises have their own capabilities. They want best-of-breed solutions. They may have their own solutions they're developing. And so integrating into the way they are operating their business is a critical capability. And our Carat solution, our, our Commerce Hub enables that to do that. You'll hear us in 2024 talk about the enterprise business, where we're, we're going to be describing our, merchant solution segment split between small businesses, enterprises, and then, of course, processing. Sure. That enterprise solution really over the last few years, as I mentioned earlier, has moved to an omnichannel solution. Having e-commerce and physical point of sale is critically important for large enterprises. And our, our Commerce Hub allows them to have full visibility, whether it's an e-com solution, whether it's a physical point of sale, whether it's an omni solution, order something online, pick it up in store, that sort of a thing. And giving them the visibility into that data in a very rich data solution has proven to be an important element and a sales feature for us. And so when we think about the opportunity for that business to sustain elements of growth that we've seen, which are strong, I mean, there's a lot of competition in the market. We've seen Braintree do more. We've seen, obviously, Adyen do well. And so do you think there's enough of a differentiating element? Is it omnichannel that when you combine your capabilities, that is a differentiator itself, geographic? Yeah, I think as you look at large enterprise clients, having an e-commerce solution, the Carat solution, is very important. And we've built out, we think, a great solution. And we're seeing that in the marketplace. But being able to combine it with the industry's leading physical point of sale capability really does provide a differentiating opportunity for us. More and more enterprises are looking for complete capability as well as the ability to bring in that best-of-breed solution where they have something that they've developed themselves or they've partnered and have in-house. And linking that into our full enterprise solution is a differentiator. Okay. So what you're seeing in your recent data, you feel a similar conviction in sustainability. Yeah. The non-Clover and non-Carat, you know, merchant acquiring processing, a lot of it is back-end processing, although not driving a ton of revenue now, right? Maybe just help us understand what the dynamics are there. I mean, it's again, it's been deemphasized, right? Yeah, I wouldn't say it's been deemphasized. So we have you, you said a couple of things there. In our small business, excuse me, in our small business business line, we have Clover and non-Clover back book. Right. In enterprise, we have Carat and non-Carat, which is really just enterprise. And then we have the processing business. I was referring more to the process. That is pure processing. Right. That's about $1 billion worth of revenue. I wouldn't say we're deemphasizing it as much as more and more clients are looking for the full solution. OK. That business has been order of magnitude $900-$1 billion. We're not predicting big growth in that space. We're happy to continue to do that. But we believe we've got a more fulsome solution. And we see our clients continue to look for that more fulsome solution. Right. I guess that's had a big impact on your overall volume growth rates. But at the end of the day, it doesn't drive a ton of revenue. Yeah, and that's certainly something we've seen over the last couple of quarters where the processing volume can move. But given that it is processing only, the individual price point doesn't move the revenue. Just in interest of time, I'd like to talk about the fintech side, which obviously is, is a core to your legacy advisor, right? And so when we think about that business, you obviously had some business shift from over to the ASP model, right? More of a recurring revenue model on that, that theoretically should be more margin accretive, I think, over time. Yeah. Can you explain the dynamics first, maybe the drivers and the demand environment in the fintech side? And then a little bit on the shift you saw from maybe license to ASP. Yeah, the shift you're talking about, we saw it take place in the Q4. This is something that's actually been happening for many years. What we saw in the Q4, particularly in the fintech segment, last year we had three segments, payments, fintech, and merchant, was a number of conversations that we were having in the Q4 with clients around a license sale. License is very strong in the Q4. Most license deals happen in the Q4 of the year. Those conversations shifted to SaaS, which is quite frankly, from an economic standpoint, we like a lot better. We're happy to have those conversations. That had an impact on Q4 revenue, because the one-time license transaction didn't happen. But as clients decide to go to ASP model, we'll see that revenue come over time, which is, again, a much better solution for us from an economic standpoint. That was a couple of points. Yeah. Flip on your growth, right? And I wouldn't necessarily predict that to occur again in 2024. We see that continuing a bit. Two things there. Number one, it's been happening for a lot of years. We think there was a bit of an uptick in that transfer, as people find it harder and harder to find technical folks. Yep. If you are going to run a licensed piece of software, you have to have your own software engineers to develop that, as well as new regulatory environments, cybersecurity. Looking to somebody like Fiserv to provide that capability is a better solution. And of course, we're happy to do that. It becomes a smaller and smaller piece of our company as more and more license move to ASP. And, you know, you're down to a much smaller piece of our overall puzzle. And some of the financial institutions that continue to license software, you know, some of them may make that transition. Some of them will hold on for a little bit longer. Your growth rate for that segment, I mean, again, it started off a little slower. Some of it was this ASP side in the Q4. But it's going to ramp to the mid-single digits, I think, again, right? Yeah, so, so for the Financial Solutions, which encompasses. Right. And includes payments now. Fintech and payments, we are expecting 5%-7% for the full year. And there are always variations within a quarter. It's actually why we give full-year guidance, not quarterly guidance. If you look at Q1 of last year, for example, the payments segment, which now is part of Financial Solutions, I think, if I remember correctly, was 12% organic growth. You won't see that again this year. Obviously, it'll be a difficult compare. There's a number of growth drivers. The Financial Solutions or the core account processing piece of that Financial Solutions segment typically grows slower than the overall segment will grow, given its core. The other thing that's changed over the last several years. In your question up front, you talked about that being kind of the legacy of original Fiserv. Absolutely true. Back then, eight years ago when I joined, it was all about selling core account processing, getting that new logo, that bank to sign up, and then selling additional services. Today, we start with additional services. We might start with debit network or with issuer solutions. Right. And then bring core alignment. So merging the segments makes sense in that regard. Exactly. Yeah. I guess just to give some time for questions and wrap it up a little bit, the payment segment and the, you know, fintechs having combined now, I mean, what are you most excited about? Star, actually, I just want to ask you about because with the Capital One deal with Discover, we're getting a lot of questions on, are these networks worth more, right? Is Star something that could be of real interest to even other companies? Yeah, number one, we've got a great debit network. We're, we're quite pleased with how that business has performed and expect it to continue to perform. It is part of our Financial Solutions segment. The combination or the recreation of that segment really is because our financial institutions over the last several years have really changed the way they buy and the way they interact with us. It isn't just about getting core and then doing something else. It's a lot of different capabilities. And we're having broader conversations with a large subset of different products, depending on what the bank is. And so it makes sense to have a single segment serving those financial institutions. Yep. In terms of the debit capability, it's been a great business. We think we're unique in that we have not only the debit network capability, but we also have the merchant capability. We think that brings an extra benefit to our client base and to our investors. OK. Guys, anybody have any questions you'd like to ask? And ask Bob. I got one. So Bob, just in terms of the rollout of Carat and different oh, thank you. Just in terms of the rollout of Carat and different geographies, what's the gating factor there? Is it just hiring the sales force? What other things have to be put in place in order to facilitate that? Yeah, so we're in a variety of, you know, dozens and dozens and dozens of countries around the globe already. And in many cases, it's driven by where our enterprise clients are doing business, and where they are looking for that solution to run their global enterprise. In many cases, we'll have a relationship within a particular geography for an enterprise and then add on additional capabilities there. And so, we're largely following where our customers take us. Other questions, guys? I mean, just one more for me, and then we'll probably wrap it up is just on the B2B side. You talked about Cash Flow Central and these wins. What can you expand on that? I just think it seems like that's a big emphasis for you guys. You partnered with Melio recently. He was also actually on a stage with us in a couple of sessions. But, you know, what kind of opportunity is this? And what are you doing for U.S. Bank now? What are you doing? Maybe just expand on that a little more. Yeah, so, we think it's a great solution. We're excited, given the early feedback we've received, both in terms of the number of financial institutions that are talking to us. The pipeline is quite rich. This is a solution we launched in Q4 of last year and had a number of wins, including a couple of large ones, right out of the gate. We think the combination of our capabilities and Melio's front-end capabilities is a home run. This is bringing a solution to financial institutions that, in many cases, are already doing bill pay with us on the consumer side. And this is a solution that allows them to easily add a solution for their small business clients. On the consumer side, we have the industry's leading consumer bill pay solution through the financial institution channels, and has been a great solution. Within the financial institution, it is a cost. If you are using your bank to pay your bills like I do, I'm not paying a fee for that. So it's an expense to the financial institution. But it retains their consumer as a client, gives them deposits, activity, et cetera. When you move to the small business, it's actually a revenue driver for them. And it deepens their relationship with their small business clients, which is obviously an important element of their growth trajectory. That history with us on the consumer side and the back end makes it easier integration and solution for them to bring to their clients. It's one they're familiar with. So we think it's a great solution. And given what we've seen so far, we're excited. It's a faster implementation because they've already got that capability. And we're excited about the growth. Seems like a pretty cool new. The other piece, of course, is not only will we sell it through our financial institutions, but we'll embed it into Clover directly for small businesses. Right. Sounds like a great opportunity. Guys, thank you very much for joining, Bob. Thank you. Always great to have you guys, next up, we have Visa on stage starting at [2:05] in five minutes.